Public engagement and informed conversations are a crucial step in ensuring our critical infrastructure developments are properly scrutinised. However, recent claims around the proposed VNI West transmission line have led the Australian Energy Market Operator to take the unprecedented step to correct the public record and label those claims as “reckless”.
With the recognition that this is an important issue and that the public should have access to a broad range of views, RE-Alliance contacted a wide range of experts. They outlined why VNI West is a crucial link in Australia’s switch to a cleaner, more reliable and efficient renewable energy system.
The Victoria to New South Wales Interconnector West (VNI West) will be a 500kV, double circuit transmission line which will increase the transfer capacity between NSW and Victoria. It is important to note that transmission has been an integral part of the energy landscape. Today, Victoria has 6500 km of transmission network, safely bringing electricity from where it is produced to where it is needed. With energy developments now taking place in new areas of the state, projects like VNI West are crucial to build a reliable and efficient supply of clean energy.
Why should we connect the states?
Dr Georgios Konstantinou, Senior Lecturer in Energy Systems with the School of Electrical Engineering & Telecommunications, UNSW notes, “Strengthening interconnections between NSW and Victoria is essential to unlock areas with high renewable generation potential, enhance network stability and resilience and enable better resource sharing. This is a priority goal aligned with the planned retirement of coal-fired power stations in both states. VNI West will also strengthen the extremely weak Western Victoria network.”
“Stronger interstate transmission links and particularly links between Victoria and NSW provide part of the new transmission backbone required if Australia is to take advantage of the diversification its size offers. Few grids have such a diversified wind and solar resource as Australia,” says David Leitch, Principal at ITK, specialising in analysis of electricity, gas and decarbonisation.
Dr Sven Teske, Research Director at the Institute for Sustainable Futures, University of Technology Sydney, recommends following AEMO’s collaborative and extensively modelled Integrated System Plan that looks forward to 2050: “Australia is modernising its power supply towards state of the art solar and wind power generation and increased digitization of the electricity supply.
“The ISP highlights system relevant new power lines and/or interconnections between existing lines. My strong advice would be to follow the recommendations of the ISP in regard to new required power line links. It will further secure Australia’s reliable electricity supply with modern renewable power generation and is key to decarbonize our energy sector.”
Dr Teske echoes Director of Monash Energy Institute Ariel Liebman’s previous comments from 2022 regarding transmission at the time the early version of the VNI-West planning were published: “the most important actions the government can take right now is to ensure investment in electricity grid transformation and its market policy support.”
Liebman adds today that, "The controversy around VNI-West today also shows that the current market and transmission frameworks and modelling tools are no longer fit for purpose. Even the revamped frameworks for actionable ISP projects require so much manual analysis that progress towards 82% renewables by 2030 will soon stall. There will be another 20 controversies like VNI-West before we are done. The existing grid connection process is already severely challenged even with new software tools recently commissioned.
To forestall energy transition failure the commonwealth and the states must level up and take the reins with a mixed market-central planning approach. They must also review the now obsolete 1990’s NEM regulatory arrangements and market designs. They will soon be unfit for purpose."
What is the consumer cost of not building new transmission?
Speaking about the need for new transmission and the costs from subsequent delays in building this critical infrastructure, Stephanie Bashir, CEO & Principal of Nexa Advisory warns, “Modelling from Endgame Economics shows delay in delivering new transmission results in higher bills for consumers. Victoria is the most severely impacted. Avoiding the cost of building new transmission does not lower consumers’ electricity bills.” According to Bashir, any ‘savings’ from not building the transmission will be heavily outweighed by the resulting cost of wholesale electricity. Grattan Institute energy director Tony Wood said to the Australian that "delays in the construction of crucial transmission including VNI West and HumeLink could create further reliability problems."
The opportunity of VNI West
Tom Quinn, climate and policy expert, says, “Victoria’s richest wind and solar resources are located in the west and north of the state. New transmission infrastructure is essential for our new energy future and will unlock jobs and opportunities for the region.” He also mentioned the opportunity that can be missed. “Recent commentary that offers the false hope that no new transmission is required misleads the community and will prevent our region from capitalising on the upside of these new developments.”
“Just as past government investment in rail, roads and ports opened up new economic opportunities for Australia, rapid deployment of new renewable energy is key to reducing energy costs and is the foundation of Australia’s prosperity for generations to come,” adds Heidi Lee, CEO, Beyond Zero Emissions.
According to Dr Teske, “New required power line links will further secure Australia’s reliable electricity supply with modern renewable power generation and is key to decarbonize our energy sector.”
Bashir adds, “The VNI West upgrades are critical for realising the opportunity in the Wimmera Southern Mallee (WSM) region – an area in the Western Victoria REZ with more than 3 GW of wind and solar projects in the pipeline. There are significant economic, social, and environmental benefits that come from these projects, with an estimated $6 billion capital investment.”
Lee looks forward to what a successful transition needs. “As part of a successful transition, we now need best practice open collaboration with all impacted stakeholders; First Nations free, prior and informed consent; and early community engagement to build in tangible community benefits from day one”. She notes that building new transmission is crucial to deliver Australia’s emission reduction targets and move towards creating a safe climate. Beyond Zero Emissions “celebrated support” from the federal and state Government “for VNI West, recognising the critical role this interconnector plays in unlocking new renewables and capacity” and the way it can unlock jobs in regional Australia.
Regions recognising the opportunities held by transmission include the Wimmera Southern Mallee. The Wimmera Development Association’s (WDA) report ‘Keeping the lights on & enabling a renewable energy revolution in Wimmera Southern Mallee’ states that “The WDA, representing the communities in the region, is strongly supportive of transmission infrastructure upgrades in the WSM region to unlock the economic opportunities flowing from both proposed and future renewable generation capacity.”
The need of the hour is good faith engagement with host communities and stakeholders to help communities understand what is already a difficult process. We need to ensure that transmission development will create flourishing regional Australia with good outcomes for regional host landholders and communities, while underpinning a strong and resilient power system into the future.
Please note this article has been updated to reflect Ariel Liebman's updated comments.